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Almost 50 years after humans last walked on the Moon, private capital has sparked a new space race. Shooting rich people into space gets all the press, but investors probably should pay closer attention to the more humdrum business of launching small satellites.

Special-purpose acquisition companies, or SPACs, are still funding the new space economy. This past week, Virgin Orbit, a firm dedicated to launching small satellites, said it would go public via such a vehicle. Its rival Rocket Lab also hit the stock market upon completion of its own SPAC deal announced in March. A third California-based competitor, Astra, has been publicly traded for two months.

Space-related headlines have mostly centered on British billionaire Richard Branson and Amazon.com founder Jeff Bezos racing to leave the Earth’s atmosphere. Of their two companies, only Mr. Branson’s Virgin Galactic—from which Virgin Orbit was spun out in 2017—is publicly traded following a 2019 SPAC deal, making it the focus of the “meme stock" craze. The firm’s enterprise value trades at a staggering 69 times the earnings it is expected to generate in 2025.

Footage of Mr. Branson floating around was an effective publicity stunt for space investing. Yet the new crop of companies deserves more attention.

Miniaturization has slashed the cost of making satellites. A constellation of them launched into low orbits, such as the Starlink system designed by Elon Musk’s SpaceX, opens up countless applications. To be sure, early movers like OneWeb have already run into trouble, echoing the disappointment that followed a previous wave of satellite ambitions in the 1990s. Yet the prize is big enough to attract enduring interest: Of the $1 trillion in revenues that analysts at Morgan Stanley expect of the space economy by 2040, half might come from satellites.

For satellite companies looking for a launch partner, a big rocket like SpaceX’s Falcon 9 offers a price per kilogram that is hard to beat, but they still need to compete for shared space on board. The newcomers’ small rockets could instead provide dedicated services to specific orbits. If the price is affordable enough, they could be a game changer.

Virgin Orbit promises the lowest unit costs by deploying its rockets from a 747 aircraft at 35,000 feet, and has already completed two successful launches. Astra has a star-studded management team, a NASA contract and a record of rapid progress, but on Saturday it ailed to reach orbit for the third consecutive time.

Rocket Lab is probably the safest bet: It has already delivered more than 100 satellites with its Electron rocket, and is also designing a medium-size reusable rocket, the Neutron, to gain an edge in completing bigger satellite networks. Virgin Orbit, by contrast, will only be able to enlarge its rockets so much before they can’t fit on a plane anymore.

Space tourism might be able to make money. Virgin Galactic already had 600 people booked onto flights, and is now selling tickets at double the price. But investors are paying a lot for a thrill ride to the thermosphere that could shut if a single customer dies. Rocket Lab is trading at a more modest 28 times the earnings that the company forecasts for 2025, while Astra hovers at around four times. Based on the details of its SPAC deal, Virgin Orbit’s enterprise value is slightly above six times expected earnings.

Intense competition among these startups almost certainly means many will fail. Historically, transportation booms have almost always burned investors. Still, for risk-happy stock pickers eager to join the latest space race, the 2021 class of SPAC targets offers new hope.

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